Archive for the 'Health Care' Category

Infinity Padlock

December 26, 2009

What was that game we’d play as kids when you wanted to lock something in so the other person couldn’t change it?   You might tell your friend that you’re good at something.  They reply, “I’m better.”  Then, you say, “I’m the best! Infinity padlock!”  I think.

Anyway, looks like Senator Harry Reid is playing that game with the health care bill.

Good Writing on Health Care

December 23, 2009

If you are having trouble figuring out what health care reform is all about, Scott Gottleib sums it up well in his piece entitled Obamacare: No Exit at the American Enterprise Institute for Public Policy Research.

In effect, the plan creates a single national health-insurance policy. Consumers’ only real option is to trade higher co-pays for lower premiums. But we’ll all get the same package of benefits established by a series of new agencies and an “insurance czar” seated in Washington.

Steve Forbes on the Crisis

December 23, 2009

In his December 10, 2009 Fact and Comment column, In-Credit-Able, in Forbes Magazine, Steve Forbes clearly communicated several points worth capturing.  Here’s on on the mortgage crisis:

Government-sponsored enterprises Fannie Mae ( FNM news people ) and Freddie Mac ( FRE news people), with their implicit government guarantees, were able to totally dominate the mortgage market. They could borrow cheaply and leverage up on a scale no private company could. When they went bingeing on subprime mortgages, they ended up twisting and then destroying the housing market. The private sector was quite capable of generating players that could have performed Fannie’s and Freddie’s roles. And because they wouldn’t have had Uncle Sam’s moral-hazard safety net, they would have been infinitely more cautious, even with the Fed creating floods of liquidity and the credit rating agencies forgetting their raison d’être. Yet Congress is determined to keep these beasts alive and under government sway. Washington is also taking over the student loan market.

This is not a well understood point.  Having the implicit guarantee of the government short-circuited the prudence that would take place in a free market.  All the bright bulbs that condemn free markets for causing the crisis, don’t seem very bright to me because they not only miss the true cause of the crisis, but they blame the very thing that could have prevented it.  Removing prudence from a free market through a government action will always end badly.

Here’s some clear thinking from Steve on health care:

The prospective government de facto takeover of health care will extend Washington’s reach into the credit markets. Health insurers will be reduced to federal vassals by being forced to offer policies at prices and terms dictated by Washington. As a reward they will have first call on the credit markets, with the same sort of implicit guarantees that once so benefited Fannie and Freddie.

It’s easy to forget, businesses like insurance companies are in business to make a profit for their shareholders.  If they don’t make a profit, there’s nothing forcing them to stay in business.

Monstrosity

December 23, 2009

At this point, I’d take Britain’s health care system over the 2,000 page monstrosity in the Senate.  I remember my Grandpa use to say that he was worried about the world because he was afraid what it would be like when the next generation took over.  Looks like he was right.

I never thought I would write this, but at least in Britain, it’s pretty simple.  You pay a tax and you go get your cruddy health care with no fees at the point of service and, I believe they have a private system that you can pay extra for if you care to receive better care.   

We are fools.

Excellent Video Series on Keynes and Hayek

December 20, 2009

This makes the second link I’ve made to PBS Newshour in the past week.  The link will take you to a series of five video segments with economists Lord Skidelsky and Russ Roberts hosted by the Lehrer.  They discuss Keynes, markets, the financial crisis and a host of other topics and, as my previous link to an interview with George Shultz, is hosted by Paul Solman.

In one of the videos, Solman describes himself as a “dispassionate reporter.”  From what I’ve seen of his work so far, I agree.  Journalism needs more like him.  After watching over an hour of his interviews now, I can’t tell if his personal beliefs lean one way or the other.  What’s more, he seems to understand the subject and is interested in getting the real story out, rather than a stylized version of the story meant to fit a predetermined narrative.  Nor does he practice “gotcha” journalism.

One quote from Russ Roberts that I will take with me is, “Capitalism is a profit and loss system.  The profits encourage risk taking.  The losses encourage prudence.”

I highly recommend watching the video series if you are the least bit interested in economics or gaining a better understanding of the the true causes of the financial crisis.

“Seven Presidents Have Failed…”

December 14, 2009

On 60 Minutes last night, Barack Obama claimed that seven presidents have tried and failed to reform health care.  Follow-up questions I would have asked:

1.  Didn’t President Bush sign the Medicare Prescription Drug, Improvement and Modernization Act in 2003?

2. Wasn’t part of that act a provision to add pretax health savings accounts for working people so that people can control more of their health expenditures?

3. If you were to analyze this major health legislation, what parts would you say are having a positive impact and which negative?

4. Do you think the parts that expanded government’s role in health care are positive or negative and why?

5.  Do you think the HSA’s are having a positive or negative impact and why?

6.  If I were Steve Kroft and I had just implied that the 2,000 page health care reform bill was a monstrosity and the President changed the subject by essentially saying, “seven Presidents have failed, but we’re close,” I might have asked, “Is this monstrosity better than failing to pass something?”

I understand there are a couple of dynamics at play.  You can’t upset the President too much or he won’t come on your show and you won’t get ratings.  Also, there is still a halo of infallibility with this guy, so journalists are having a hard time coming to grips with the fact that he is a human after all, and maybe, just maybe, it’s a bit much to expect someone to go from junior senator to legendary world leader in a year’s time.

Charles Krauthammer on the Health Reform Bill

November 30, 2009

Horrifying piece from Krauthammer.

The fundamental problem with the 2,074-page Senate health-care bill (as with its 2,014-page House counterpart) is that it wildly compounds the complexity by adding hundreds of new provisions, regulations, mandates, committees and other arbitrary bureaucratic inventions.

The only thing linking these changes — such as the 118 new boards, commissions and programs — is political expediency. Each must be able to garner just enough votes to pass. There is not even a pretense of a unifying vision or conceptual harmony.

Insuring the uninsured is a moral imperative. The problem is that the Democrats have chosen the worst possible method — a $1 trillion new entitlement of stupefying arbitrariness and inefficiency.

And Krauthammer proposes a few reforms for those who ask “what reforms do you propose?”  Tort reform, end prohibition of selling insurance across state lines and tax employer-provided health insurance.

Why Health Care Reform May Not be a Bad Idea

November 24, 2009

Free markets take an undue blame for many of today’s top problems, when the problems are rooted in government interference.  This is true for health care.  The cost of health care has risen faster than inflation for decades and is hitting that level where affordability is becoming a growing concern.

Many people reflexively blame free markets for the problem.  They think insurance companies and health care providers are just out to fleece us while the guys that run these businesses smoke their fat stogies in their posh boardrooms and spend all our money.

They neglect to consider the impact government interference has on the health care market.    Health care costs have climbed right along with the percent of medical paid by government programs.  Costs have also climbed along with the percent medical paid by third parties, driven by the tax advantage of employer paid health insurance and sate mandates on what treatments health insurance policies cover.  These alone cause enough trouble.  That doesn’t get to the supply constraints placed on the market by state and local governments  that regulate hospital beds or the AMA’s soft influence on the quantity of medical providers in the market or cost constraints placed on hospitals for not being allowed to turn away someone based on their ability to pay (someone has to pay those costs).

In fact, rarely are these things ever discussed.  The fact is the U.S. health care market is about as far from a free market as you can get.

Few people understand what a free market is.  Many people define a free market as one that has the presence of for-profit companies.  That’s wrong.  A free market is one that’s free from government intervention and regulation.  Our health care market is far from that.

I’ll take the definition of free market further.  I consider a free market to be one where a reasonable percentage of the costs are paid by first parties (i.e. the people using the service) through voluntary transactions.

Which brings us to another misconception about the health care market.  Some people argue that many medical procedures are not voluntary.  In other words, a person must get a life saving treatment or die, which puts health care providers in a more powerful bargaining position.

That argument seems sounds, but ignores the evidence that has piled up from markets in other goods and services that are relatively more of a free market than health care, that is  free markets are eventually great for everyone.  The innovation and competitiveness bring more choices and quality for all levels of budgets than less free markets.   How vital is food?  Very.  You need it to live.  Yet the percent of income we spend on food has fallen dramatically over the past century as our food processes have become more productive through innovation and competition.

That reduction in food costs gives us more income to spend on other things like cell phones, iPods and maids.  People in my family have maids that clean their homes twice a month.  Only the wealthy could afford anything like that when I was a kid.

Finally, that brings me back to my original thought.  Why health care reform may not be a bad idea.  If we eliminate all pretenses of a free market and health care blows up in our faces – along with the faces of other countries that depend on our innovations to keep their government medical systems serviceable – we will not be able to blame free markets any longer.

Mind Changer of the Week

November 21, 2009

The recent recommendation from the United States Preventive Services Task Force, a government-appointed group, to reduce breast cancer screenings seemed to get a few people thinking about whether government health care is such a good idea.

While the Left trips over itself to keep us from sliding down the slippery slope with editorials like this one in the NY Times (amazing that they can’t seem to so the same calming, let’s look at the facts and think about this demeanor with stuff from the Right), they may have trained the consumers of their propaganda media to well to react to headlines and ignore facts. 

For many people, the words that register are “government appointed group” and “scale back on breast cancer screenings” and they’re off to the races imagining a world where the government rations necessary treatments because of what appears to be b.s. opinions from so-called experts, a world where it’ll be the people vs. the government.